Security of Payment Act

Introduction to the Building and Construction Industry Security of Payment Act

The Building and Construction Industry Security of Payment (SOP) Act took effect on 1 April 2005. The Act aims to improve cash flow in Singapore's Built Environment sector by granting parties the statutory right to seek progress payment for work done. It also provides a fast and low-cost adjudication mechanism to resolve payment disputes. This will benefit main contractors, subcontractors, consultants, and suppliers involved in construction and supply contracts.

Key Provisions

Payment claim and response procedures

A person who has a written contract and has carried out construction work or supplied goods or services according to the contract can make a payment claim under the Act. The claimant is entitled to serve a payment claim within the period stated in the contract or mutually agreed in writing. The respondent who entered into the contract with the claimant should then respond to the payment claim. Please refer to the Process flowchart [PDF, 124 KB] for the details of serving a payment claim and responding to the claim. Alternatively, you can refer to the Sample Forms [PDF, 295 KB] to better understand what needs to be included in a payment claim and response.

Adjudication process

The SOP Act allows a claimant to apply for adjudication if the claimant disagrees with the response amount or fails to receive payment stated in the payment response.  Adjudication is a fast-tracked process to resolve disputes in a quick and relatively low-cost manner. An independent adjudicator determines impartially the amount payable for a claim made under the Act. Please refer to the Quick Guide on SOP Act [PDF, 1.95 MB] and Information Kit on the Act [PDF, 293 KB] for more details of the adjudication process.

Authorised Nominating Body

The Authorised Nominating Body (ANB) is an organisation appointed to facilitate the adjudication process. The current appointed ANB is the Singapore Mediation Centre (SMC). It is a not-for-profit organisation under the Singapore Academy of Law, providing commercial mediation services. All Adjudication applications are to be submitted to the SMC via the website provided above. 

Amendments to the SOP Act

The Building and Construction Industry Security of Payment (Amendment) Act 2018 and the Building and Construction Industry Security of Payment (Amendment) Regulations 2019 commenced on 15 December 2019. Please refer to the Industry Circular issued by BCA on 26 November 2019 and the Explanatory Notes for more information on the amendments.

Additional resources

For the full legislation, please refer to the following:

• Building and Construction Industry Security of Payment Act

• Building and Construction Industry Security of Payment Regulations